Ups and downs Economic and cultural effects of file sharing on music, film and games

On Februry 18, a report commissioned by the ministry of Economic Affairs, the Justice Department and the ministry of Education Culture and Science called "Ups and downs Economic and cultural effects of file sharing on music, film and games" was released. A few days ago, the official English translation was released as well.

The research shows that the economic implications of file sharing for welfare in the Netherlands are strongly positive in the short and long terms. File sharing provides consumers with access to a broad range of cultural products, which typically raises welfare. Conversely, the practice is believed to result in a decline in sales of CDs, DVDs and games.

Determining the impact of unlicensed downloading on the purchase of paid content is a tricky exercise. In the music industry, one track downloaded does not imply one less track sold. Many music sharers would not buy as many CDs at today’s prices if downloading were no longer possible, either because they cannot afford it or because they have other budgetary priorities: they lack purchasing power. At the same time, we see that many people download tracks to get to know new music (sampling) and eventually buy the CD if they like it. To the extent that file sharing does result in a decline in sales (substitution), it usually entails a transfer of welfare from producers to consumers. With estimated welfare gains accruing to consumers totalling around €200 million a year in the Netherlands, music producers and publishers suffer turnover losses of at most €100 million a year. These calculations are necessarily based on several assumptions and contain uncertainties as many of the underlying data are not precisely known. Whereas comparable figures cannot be provided for the film and games industries, they follow a similar logic.

Economy Profits From File-Sharing, Report Concludes

Source Torrentfreak:

Commissioned by the Dutch government, a recently published report concludes that file-sharing has a positive effect on the economy, both on the long and short term. A massive 30% of the Dutch population uses file-sharing software to download music, games, movies and other forms of entertainment, which is now considered to be a ‘good thing’.
File-sharing gives people access to a wide range of cultural goods and is often used to sample content that is bought later, the report concluded. Most file-sharers would have never bought the content they downloaded, but having access to such a large media library increases the welfare of Dutch citizens, the researchers note.

Frankly, the findings of this study do not surprise me and they point to the power of the long tail for cultural economy. Wider range of access to cultural product is a good thing, in and off itself. People will be able to find what they really care for (rather than stick to what is just not objectionable enough to switch off -- the basic mode of operation of TV and other broadcast media) and form that engagement, many things can flow.

Ars Technica writes:

Things get really interesting on page 116 as the report starts to dissect the societal effects of file sharing. The study concludes that the effects are strongly positive because consumers get to enjoy desirable content and also get to keep their cash to buy other things. Because the consumers save much more money than the producers lose, the net economic effects are positive. The report also reinforces the truth that unpaid downloads do not translate into lost sales in anything close to a one-to-one ratio.

Online Collaboration goes legit

David Bollier writes:

It is one thing to talk about the “virtual corporation” and online commons as new organizational forms. It’s quite another to have those forms be legally recognized. Yet in a little-noticed law enacted in June 2008, the State of Vermont has formally conferred “legal personhood” on online communities that wish to form limited-liability partnerships.


The Vermont law strikes me as an ambitious next stage in the evolution of tech and legal infrastructure that started with free software and Creative Commons. The General Public License (for free software) and CC licenses authorize new forms of sharing and collaboration, and have the force of law. We’ve seen the explosion of new online creativity and collaboration that has resulted. The new Vermont law has the potential to authorize all sorts of interesting new collaborative organizations that would have the full legal standing to “compete” with conventional corporations.

My friend John Clippinger of the Berkman Center has described the virtual corporations law as the first step toward imagining a new type of “cloud law.” He is referring to “cloud computing,” the next generation of computing that will locate software systems in the “cloud” – remote server-farms that are accessible from anywhere, through one’s iPhone, laptop or other portable device. Cloud computing will be sold as a utility – like electricity or phone service – and will enable even more powerful modes of Web 2.0 collaboration. For economic reasons, tech experts regard the Cloud as the virtually inevitable next stage of computing.

Making Money on YouTube

The NYT has an interesting article on people who make money with the regular video shows (apparently all comedy). Through YouTube's partner program (where people can register to have adds shown next to their video -- so that youtube can be sure not to show adds on pirated content). According the a company spokesperson, there are "hundreds of YouTube partners are making thousands of dollars a month." One of the shows as an average of about 200'000 viewers with popular episodes up to three million.

Mr. Williams, who counts about 180,000 subscribers to his videos, said he was earning $17,000 to $20,000 a month via YouTube. Half of the profits come from YouTube’s advertisements, and the other half come from sponsorships and product placements within his videos, a model that he has borrowed from traditional media.

On YouTube, it is evident that established media entities and the up-and-coming users are learning from each other. The amateur users are creating narrative arcs and once-a-week videos, enticing viewers to visit regularly. Some, like Mr. Williams, are also adding product-placement spots to their videos. Meanwhile, brand-name companies are embedding their videos on other sites, taking cues from users about online promotion. Mr. Walk calls it a subtle “cross-pollination” of ideas.

Neue Formen der Öffentlichkeit und kulturellen Innovation zwischen Copyleft, Creative Commons und Public Domain. (Buchkapitel)

In: Hoffmann, Jeanette (Hg.). Wissen und Eigentum. Geschichte, Recht und Ökonomie stoffloser Güter. Bundeszentrale für Politische Bildung, Bonn. 2006,0,Wissen_und_Eigentum.html

In den letzten 10 Jahren ist eine neue, weltweite Bewegung entstanden, die grundsätzlich neue Modelle der Produktion von und des Zugangs zu digitalen Gütern nicht nur fordert, sondern auch bereits im grossen Stil praktiziert. Wissenschaftler, Autorinnen, Künstler, Musikerinnen, Programmieren und andere 'immaterielle Produzentinnen' nutzen dabei das bestehende Urheberrecht in einer neuen Art und Weise. Das Urheberrecht gewährt ja einem Autor geistiger Werke (im Bereich der Literatur, Kunst, Wissenschaft, Design, Computerprogammierung, etc) exklusive Verfügungsrechte über seine Schöpfungen, die nur durch eng definierte Schranken eingegrenzt werden. Diese Rechte entstehen automatisch mit der Kreation des Werkes, ohne dass es registriert oder anderweitig gekennzeichnet werden muss. Der Autor kann (fast) frei bestimmen, wer, wann, wie und unter welchen Umständen sein Werk nutzen kann (siehe Beiträge von Thomas Hoeren und Till Kreutzer in diesem Band). Die neue Nutzung dieser Rechte ziehlt darauf ab, den Zugang zu den Werken zu vereinfachen, in dem etwa das freie Kopieren erlaubt wird, und Möglichkeiten der Öffentlichkeit zu erweitern, mit diesen Werken kreativ umzugehen.

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